Macroeconomics 11th Edition by Michael Parkin

Exercise 11

After you have studied Reading Between the Lines on pp. 204-205, answer the following questions.
a. What changes in the monetary base have occurred since October 2008 and how much of the increase occurred during the Fed's QE2 period?
b. How does the Fed bring about an increase in the monetary base
c. How did the increase in the monetary base change the quantity of M2Why was the increase so small
d. How did the change in M2 influence short-term nominal interest ratesWhy
e. How did the change in monetary base influence long-term nominal interest ratesWhy
f. How did the change in monetary base influence long-term real interest ratesWhy